Bookshops kindle legal war with Amazon

Date: February 21 2013

Three small, independent, brick-and-mortar bookstores have filed a lawsuit against Amazon and America's big six publishers, claiming that they are violating antitrust laws by collaborating to keep small sellers out of the e-book market.

In a lawsuit filed Friday in a New York district court, the Book House of Stuyvesant Plaza and Posman Books, both based in New York, and Fiction Addiction, based in South Carolina, alleged that they and other small bookstores were being deliberately forced out of the digital market as a result of agreements between the big publishers and Amazon.

"The contracts entered into between Amazon and the Big Six," the complaint said, constitute "a series of contracts and/or combinations among and between the defendants which unreasonably restrain trade and commerce in the market of e-books sold within the United States".

At the heart of the lawsuit is the idea that the top publishers signed secret contracts with Amazon that allowed them to code their e-books in such a way that the books could only be read on an Amazon Kindle device or a device with a Kindle app.

The booksellers are pushing for open-source coding that would allow readers to buy e-books from any source and download them on any device.

They argue that the proprietary coding compels consumers who own Kindles or tablets with Kindle apps to buy e-books only from Amazon. The lawsuit states that the publishers have no similar contracts with independent booksellers.

It also notes that Apple once used similar exclusive coding, known as DRM, in the music business, but that after a series of legal challenges, all music available on iTunes was made DRM-free.

The booksellers are seeking an immediate injunction to the practice, as well as damages.

The six publishers named were Random House, Penguin, HarperCollins, Macmillan, Simon & Schuster and Hachette. The plaintiffs said their claim was a class action on behalf of other independent booksellers as well.

In a statement, Adam Rothberg, a spokesman for Simon & Schuster said, "We believe the case is without merit or any basis in the law and intend to vigorously contest it. Furthermore, we believe the plaintiff retailers will be better served by working with us to grow their business rather than litigating."

Amazon said it would not comment on ongoing litigation. The other publishers declined comment or did not immediately return phone calls.

New York Times

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